* U.S. Fed stimulus withdrawal talk pumps up dollar
* Fund managers, strategists position to tap trend
* Pharma, consumer goods, miners all seen as targets
By Francesco Canepa
LONDON, July 11 European share investors looking to protect themselves from a curbing of U.S. monetary stimulus are targeting companies with a chunk of their earnings in dollars.
The dollar recently hit a three-year high against a basket of currencies, boosted by the prospect of a winding down of U.S. money printing at a time when central banks in Europe are still trying to stimulate their sluggish economies.
Prospects for U.S. growth are also better than in Europe and potentially many emerging markets, meaning that companies looking for dollar exposure are not only doing so for currency exchange reasons.
Searching for dollared companies is relatively new, but a sample of 20 European consumer stocks offering at least 20 percent sales exposure to North America has risen by an average 15 percent year to date, or three times as much as the pan-European STOXX Europe 600.
"We look for European companies that actively trade with the U.S. and benefit from the recovery there and from the dollar's strength," said Matthias Thiel, market strategist at Hamburg-based M.M. Warburg, which has 44.4 billion euros ($56.77 billion) under management.
"We expect the growth differential between the U.S and Europe U.S. to stay for longer."
Among possible winners are Belgian food retailer Delhaize , British publisher Pearson and Dutch grocer Ahold, all of which get at least 60 percent of revenues in North America.
Pharmaceutical firms such as UK-listed AstraZeneca, where U.S. sales account for around 40 percent of the total, are also seen as dollar-play winners, although both European pharma and consumer sectors have relatively full valuations.
They trade at multiples to their futures earnings that are in line with their 10-year averages, compared with a 6 percent discount for the broader STOXX 600 index.
That meant some were looking for a cheaper bet on a lasting rebound in the greenback through an option on blue chips in Britain's FTSE 100 index, which get nearly a quarter of revenues from the United States.
Kokou Agbo-Bloua, European head of equity and derivative strategy at BNP Paribas, said investors were using options to bet on a rise in the FTSE this year thanks to a weaker pound.
DOLLAR BEAR TO BULL
U.S. Federal Reserve policy tightening at a time of slowing Chinese growth has led some asset managers to expect the start of a multi-year dollar bull market.
That has already seen money leave emerging markets and into U.S.-focused funds in the second quarter of the year, Lipper data showed.
"We're still at a very early stage of people moving around to a more positive structural dollar view," Paras Anand, head of European equities at Fidelity, said. "We're probably nearer the beginning than the end of this process."
Mark Tinker, manager of AXA Framlington's global opportunities fund, expected further flows out of emerging market equities, commodities and bonds into assets that benefit from a stronger greenback, such as European stocks with dollar earnings.
"There were a lot of people that were short the dollar and long emerging market equities, commodities and bonds and as the dollar rises they become forced sellers," Tinker said. "The unwinding of those short dollar trade has got a bit further to go."
JP Morgan's strategist Emmanuel Cau said this trend could be played in European stocks by buying companies that export to the United States and selling those that export to emerging markets.